This eToro review was last updated on 21 February 2022.
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I remember back in 2012 when eToro was being branded nothing but a bucket shop by the trading community, but I never really understood why. eToro is highly regulated in several countries, and there is no way they would risk losing their license by involving themselves in shady practices, especially here in the UK.
Market makers are usually referred to as bucket shops and although eToro uses the market maker model it does also use STP (Straight-Through-Processing) technologies and NDD (No Dealing Desk) practices, which means all trades are executed in real-time, with no interference.
Roll on ten years, and eToro is still going strong. The broker is now arguably the world’s largest social trading platform; it operates in 140 countries and has over 20 million users. In March 2021, it announced plans to become a publicly-traded company.
eToro has consistently developed proven, cutting edge fintech technologies that provide its traders with powerful, intuitive trading tools, and this is one of the reasons why it has remained king.
A little background
The company was founded in 2007 in Israel by brothers Yoni Assia and Ronen Assia together with David Ring as RetailFX. It rebranded to eToro in 2010 when the firm introduced the eToro OpenBook social investment platform.
eToro fees
eToro runs a multi-asset brokerage and offers CFDs (in selected countries), stocks, ETFs, currencies, commodities and cryptocurrencies.
You can buy UK and international stocks commission-free, an incentive introduced in 2019 which has paid off for eToro in a big way. Commission-free trading means that eToro customers (in the UK and Europe) can buy shares from leading exchanges worldwide without having to pay any spread fees. You can also buy fractional shares, which is ideal if you can not afford to buy expensive stocks such as Amazon and Google.
But it’s not all free; there are other platform fees to consider, such as when trading CFDs (including stocks) or cryptocurrencies, withdrawing funds, currency conversions and account inactivity – something that eToro should consider scraping.
Let’s take a look at eToro fees below.
| Minimum deposit | $50 (£38) |
| Platform charge | No charge |
| Fee per trade | No charge |
| Fee per CFD trade | Spread fee (check fees) |
| Overnight fees | Yes, for CFD positions (check fees) |
| Weekend fees | Yes, for CFD positions (check fees) |
| Forex conversion | 0.50% |
| Deposit fee | No charge |
| Withdrawal fee | $5 (£3.70) |
| Inactivity fee | $10 (£7.40) |
What features does eToro have?
eToro offers great user-friendly tools such as CopyTrader, Smart Portfolios, watchlists, portfolio overview and investment opportunities and ideas by highlighting top risers and best performing traders if copying is your thing.
CopyTrader
CopyTrader is a popular feature that allows investors to copy top-performing traders without the need of having to constantly keep an eye on markets 24/7. CopyTrader is an ideal tool to use if you are just starting your investing journey. The minimum amount to start copy trading is $200 (£148) per trader.
Copy-trading doesn’t come without risks, but no kind of trading does. Before you invest your hard-earned cash, check the trader’s past performance. Although past returns are not a guide to the future, checking trader stats will give you an idea of how well they manage risk with eToro’s risk rating.
Smart Portfolios
Smart Portfolios is an eToro portfolio management product.
Investing in eToro Portfolios will automatically copy multiple markets based on eToro’s in-house investment strategy. The minimum amount required to invest in smart portfolios is $500 (£370).
Watchlists
You can create multiple personal watchlists for any asset listed on eToro. This tool allows you to keep an eye on prices, daily performance and community sentiment without the need of having to search for an asset every time you log in.
Portfolio Overview
The portfolio overview gives you a snapshot of how your portfolio is performing; you will be able to see the amount invested, returns and losses all from one screen.
Investment Opportunities
The discovery section gives you an overview of what markets, assets and traders are the best performers, giving you access to great investment opportunities.
Advanced Charting
Interactive and advanced charting is something that every technical trader dreams of. Chart analysis allows traders to analyse market data using tools such as trend lines, support and resistance areas, channels and Fibonacci retracements to find patterns that will help identify trends and make predictions.
Risk Management
eToro has excellent risk prevention tools such as stop losses, trailing stops, and leverage limits.
Education & Market News
eToro gives traders access to the latest market news and has an array of investing guides in the eToro academy.
eToro pros and cons
| Pros | Cons |
| Low fees | Withdrawal fee |
| Mobile app | Charting needs improvement |
| Over 2000 assets | CFDs not separated from commission-free stocks, this can cause confusion |
| Fractional shares | No ISA account |
| No deposit fees | One base currency ($USD) |
| Multiple deposit methods | Slow customer support |
| Free demo account | Inactivity fee |
| CopyTrader |
There are two changes that eToro should make. Firstly, it can be confusing for first-time investors to differentiate between commission-free stocks and CFDs. eToro does highlight this on-screen very vaguely, but it is not made clear enough, and they should section off CFDs just like Trading212 does for beginner’s sake.
The inactivity fee of $10 USD per year for accounts with no activity for 12 months should be scrapped. There is no real explanation as to why they charge this fee, but I suspect it may have something to do with admin costs associated with keeping regulators up to date.
To avoid being charged the inactivity fee, you should deactivate your account before the 12 months is up.
Final Thoughts
Is eToro the best trading platform available? No, but it is up there with some of the very best.
The account opening process is fast and seamless.
The platform is easy to use and is well suited for casual investors and beginners with a basic understanding of stocks, forex and cryptocurrency trading.
eToro has relatively low fees, it is safe, secure and very well regulated. The company is regulated by CySEC, FCA, MiFID and ASIC.
eToro is also covered by the Financial Services Compensation Scheme. Any money deposited with or assets held by eToro UK will be treated as investments for the purposes of the FSCS. Accordingly, the maximum amount of compensation per person is £85,000. Cryptocurrencies are not covered.
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